In order to determine which employee wages you can count towards your refund, you first need to figure out if ERC guidelines classify your business as either a small or large employer. For both 2020 and 2021, this classification is based on your average number of full-time, W2 employees in 2019.
- For 2020, small employers are those who had 100 or fewer full-time, W2 employees in 2019
- For 2021, small employers are those who had 500 or fewer full-time, W2 employees in 2019
This distinction matters because qualified employee wages for small businesses are any wages paid to any W2 employee in any given quarter, while qualified wages for large businesses are only those wages paid to W2 employees who were NOT providing services.